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Do You Think What Happens In The Middle East Doesn’t Affect You? Think Again.

February 27, 2011

Like many drivers, the rising cost of gas is real drain on my finances. The possibility of it going up to $5 a gallon makes me want to take the bus more often. With the economy slowly pacing along on its road to recovery, where is this increase coming from? The answer is over 10,000 miles away in the Middle East. The bloody uproar in Libya, the worlds 12th largest exporter of crude oil, is driving our prices through the roof.  Muammar Gaddafi, Libya’s leader, has ordered the destruction of the country’s oil facilities in an attempt to show how his regime can wreak havoc worldwide. Mission accomplished sir. Oil prices spiked to the 100 hundred-dollar mark per gallon on Wednesday, the first time since 2008. That caused the average gallon of gas in the United States to raise by 5 cents to $3.19, the highest average price since February 1990.

If prices per gallon keep increasing, the monetary effects will reach deeper than just purchasing gas. Airlines, public transportation systems and delivery companies could raise their rates to make up for the added fuel costs. This means little things like your milk and bread could cost you more because the company delivering it charged more to the distributor and, in an effort to cover that extra cost, has hiked up the product cost. If this is where we are headed, many Americans will simply cut back, just when spending started to pick up. With an already fragile economy, our recovery time frame will be severely halted. Sounds pretty bad huh? Keep this in mind, if the violence spreads to Saudi Arabia, who accounts for 9% of the world’s oil supply, the effect on oil and gas prices would be even more severe than our current situation. It could be 2008 all over again, or worse. My advice, watch the news and stay informed. Know whats going on and start saving now. Have a little nest egg to fall back on in the event our economy finds itself in severe crisis again.

We would love to hear your thoughts on this issue at GAI ( Need help creating that nest egg or aren’t sure you can afford to do so? The professional and reliable staff at GAI can help by creating a spending plan and making sure you get the biggest possible refund this tax season. So give us a call at 212-979-6830 or stop by for a visit. We are open Monday-Friday 8am-8pm and Saturdays 8am-5pm.

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